Active stock markets decline for third day

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Stock markets actively reduced the third day, also putting pressure on commodity platforms. The main driver for the reversal was the Powell speech on Tuesday. His desire to stick to the plan increases and to avoid overheating of the US economy gave rise to fears from investors that the fed thinks about the four, and not three increases of rates this year.

The foreign exchange market

Pull in safety caused the loss of more than 1% of the key US indices on Wednesday and was the main reason for the decline of the Asian platforms on Thursday morning at 0.4-1.2%. A cautious attitude has caused the growth of the dollar on the currency market to highs for a month and a half. EURUSD is trading below 1.2200 in the morning, losing two days just over 1%. The British pound dropped 1.5% and the Japanese yen, by contrast, benefited from traction in the security, adding a day to the dollar 0.7%.

The rate of oil today

Oil lost yesterday in the late afternoon of 3%, being under pressure both because of the traction to safety, and because of the weekly report on reserves and production. Stocks of oil and gasoline has increased, and mining has updated the record. In the medium term, it is worth to note that stocks are now 18.6% below levels a year earlier, reflecting a rebalancing of the market. Production growth kompensiruet unusually strict discipline of production in Saudi Arabia. Besides the economy, key consumers (U.S. and China) show an increasing demand, so yesterday’s failure of quotations should be viewed as a temporary reaction to the news, but hardly as a new round of collapse, as it was in 2014.

The ruble

The combination of these factors forms the basis for a very weak opening of trading on the Russian market. The USD / RUB pair closed Wednesday at a level 56.33, but this morning could break the mark of 56.50, returning to levels of late last week. The pair EURRUB yesterday during the day tried to break above 69. Probably, bulls this morning will make another, more successful attempt. However, the weakening of the single currency on the Forex pair EURRUB leaves about 90 cents below the closing levels of last week.
Alexander Kuptsikevich,
Financial analyst,